Category: Code on Wages

ISSUE:

Whether the Minimum Wages Act, 1948 (“the Act”), which allows the government to fix minimum wages, violates the fundamental rights of employers under Article 19(1)(g) (right to practice any profession, or to carry on any occupation, trade, or business) and Article 14 (right to equality) of the Indian Constitution?

Whether the Act constitutes an unreasonable restriction on the freedom of trade and business?

Whether the principle of natural justice is applicable in this case?

RULE:

The right to carry on business is subject to reasonable restrictions in the interest of social justice and the welfare of workers, and the Minimum Wages Act, 1948, is a legitimate exercise of this principle.

The question of whether a particular principle of natural justice applies in a case depends on the facts and circumstances of each case.

ISSUE:

Whether this petition is maintainable against Union of India, Delhi Administration and Delhi Development Authority when in actual the offending parties are private contractors?

Whether this petition is maintainable as there is no breach of fundamental rights of labourers but of ordinary rights under labour laws?

RULE:

A principal employer’s duty to uphold labour laws is non-transferable, making them accountable for any contractor violations.

Under Articles 14, 21, 23, and 24 of the Constitution, all workers have the right to dignity, fair wages, and humane working conditions.

Violations of these protections breach workers’ fundamental rights, placing sole responsibility on the principal employer to ensure compliance and safeguard worker welfare.

ISSUE:

Whether the workers were paid a ‘living wage’ which would disqualify them from claiming a bonus?

RULE:

Constructing a wage structure involves ethical and social considerations, addressing workers’ needs in a progressive society.

The impact of award of bonus in an industrial dispute on other establishments in the region must be given due importance while fixing the amount.

The distribution of available surplus in the form of bonus depends on the facts and circumstances of each case.

The concept of living wage is not a static concept – it expands with the growth of the national economy.

ISSUE:

Whether payment of lesser salary to a senior than his junior in the same cadre is violative of the principle of equal pay for equal work enshrined in the Constitution under Articles 39(d), 14 and 16?

RULE:

"Equal pay for equal work” does not require identical pay for all in a cadre.

Variations in pay, based on seniority, recruitment source, qualifications, or performance criteria, are justified if they follow valid rules and align with fair objectives.

ISSUE:

Whether Anganwadi workers considered as holders of a “civil post” under the State, thus entitling them to certain employment rights and benefits?

Whether the State is liable to pay minimum wages to those working under a project such as Integrated Child Development Service (ICDS)?

RULE:

Anganwadi workers do not hold a “civil post” under the State and hence, their application under Section 15 of the Administrative Tribunals Act, 1985, is not maintainable.

The State is not liable to pay minimum wages to those working under a project, unless the same is specified within the schedule of the Minimum Wages Act, 1948.

Not all employees who fall under the purview of Article 12 (defines the state, including state governments and state legislatures) are government employees.

Employees working under a programme controlled by the State cannot take advantage of Article 311 (safeguards for civil servants against arbitrarily dismissal, removal, etc.) by that reason alone.

ISSUE:

Whether in ascertaining minimum wages, statutory notification under the Minimum Wages Act, 1948, takes precedence over agreement for lower wages between employer and employed?

Whether dearness allowance should be considered while fixing minimum wages in accordance with industry standards?

RULE:

When determining minimum wages, reliance on statutory notifications under the Minimum Wages Act is advisable, as they offer valuable guidance. Furthermore, assessments of basic wages should include comparisons with industry standards, factoring in both the basic wage and the dearness allowance to ensure comprehensive consideration of workers' overall earnings.

ISSUE:

Whether the management could alter the dearness allowance scheme to prejudice of workmen, based on the claim that the existing system over-compensated them relative to industry standards?

RULE:

Management may revise wages to workers’ disadvantage only if it proves financial inability to sustain current wages, which are above the level of minimum wage.

Minimum wages, covering basic needs and welfare, are a protected right; employers unable to meet them should cease operations.

Dearness allowance must be determined on the basis of current money value of the components of minimum wage, rather than an outdated wage structure, in order to account for inflation.

Wage or dearness allowance restructuring requires proof that current wages exceed minimum living standards and are financially unsustainable.